| Good morning Voornaam, If you came into this year with a portfolio full of local retail stocks, you've had a rough month. The Foschini Group is down 11.3%, although it's still 34% higher over the past 12 months. Mr Price has taken a 13.4% knock in January, yet it has registered a gain of 50% over 12 months! I elaborated on the broader sector story (and how severely I underestimated Mr Price share price momentum last year) in my latest Supernatural Stocks podcast on Moneyweb (you'll find it here if you're interested).
Focusing on The Foschini Group though, we see a clear difference between the performance in the stores and the growth in Bash. Although Bash can't exist without the stores, it looks as though we are heading towards a world where the reverse may start to apply as well! Underestimating the importance of online is foolish to say the least. I remember when people thought Sixty60 was just a gimmick at Checkers.
Aside from a detailed look at The Foschini Group, there is also an update this morning on Blue Label Telecoms getting a regulatory approval in place related to the Cell C strategy. Reinet has released its NAV for December 2024, which is the last time that British American Tobacco will be included! York Timber raised the funding for the Stevens Lumber Mills deal.
And of course, there is a selection of Nibbles to keep you busy as well. Get my views and analysis in Ghost Bites>>>
You only have a few days left to apply for equity funding from MIC Khulisani Ventures if you are a qualifying Black-Owned business. After we released a podcast with full details at the end of 2024, the team has summarised the opportunity in a new article that includes a link to the podcast for those who missed it. Don't delay!
Dominique Olivier's latest column may restore some of your faith in corporate citizenship, with a selection of great examples of companies solving social problems through product innovations. From Savlon's soapy chalk in India through to Energizer's bitter batteries, this piece shows what happens when smart people apply their minds to the right stuff.
And finally, the latest Magic Markets episode that will give you helpful insights into the banking sector and how banks make money. We also talked about many of the tough decisions they need to make around capital allocation and balance sheet management. With our usual approach of combining a macro lens with bottom-up analysis, we explain why you can bank on banking - albeit with a preference for the US rather than the local market. Enjoy the podcast and transcript here>>>
Have a great start to your week! |
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| SATRIX: Low-risk high-reward - the low-volatility anomaly |
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| | | Does taking higher risk always lead to higher returns? Or is there something to be said for seeking out lower volatility equity exposure, especially if it can generate similar overall returns?
Nico Katzke of Satrix digs into the numbers to bring you this insightful piece on portfolio and risk strategy.
Enjoy it here>>> |
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| Ghost Wrap - five insights from December |
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| | | Ghost Wrap: There were some great stories in December that are well worth keeping in mind in January. Italtile's share price needs a careful watch. Prosus is making major acquisitions again. Renergen is still dealing with teething issues - and a legal dispute as well. Metair is getting very little out of its Turkish business. Finally, will Bell Equipment shareholders kick themselves? I cover these topics in Ghost Wrap, brought to you by Forvis Mazars and available here>>> |
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| MIC KHULISANI VENTURES - A game-changer for Black-Owned businesses in South Africa |
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| MIC Khulisani Ventures is looking for Black-Owned business with high scalability and a commitment to growth. Equity funding is available and applications close at the end of January 2025. Get the details here>>> |
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| GHOST BITES - Making sense of SENS on the local market |
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| | | The Foschini Group seems to be underperforming at store level. Reinet had a strong finish to 2024. Blue Label Telecoms is a step closer to control of Cell C. York has raised funding for the Stevens Lumber Mills deal. Get the details in Ghost Bites>>> |
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| DOMINIQUE OLIVIER - Short Stories v.05: Ideas for good |
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| In a profit-motivated world, there are companies that find ways to solve genuine social problems through their products. Savlon, Honda, Energizer, Phillips and Renault all caught the attention of Dominique Olivier with their initiatives. Get the story here>>> |
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| Unlock the Stock - KAL Group |
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| | | Unlock the Stock: KAL Group joined the platform for the first time to talk about the performance and strategic focus areas in the broader agriculture industry. Enjoy the presentation and Q&A here>>> |
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| MAGAnomics: Trump and the global economy |
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| International Business Snippet: |
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| Brace yourself for a crazy day in chip and AI stocks, with headlines this morning focused on Chinese AI startup DeepSeek and the threat of disruption to the status quo. Time and time again, the market forgets about the likelihood of competitors emerging that could upset the growth story of everyone's favourite hype stocks.
History has taught us that technology gets cheaper over time. There's no reason why AI should be any different, which leaves early adopters (who sank many billions of dollars into development) vulnerable to disruption. To my knowledge, there's no obvious moat for any of these AI models. Switching costs are low and "brand" loyalty is non-existent.
With Japanese chip stocks off to a terrible start this morning, watch out for what could happen to the US tech stocks later today. With the frothiest valuation in the peer group and the most obvious exposure to what happens in AI, NVIDIA is surely most at risk of a sell-off if the market panics.
To add to this juicy week, Apple and Meta are also due to release results later this week!
The markets are crazy things. We try and make them easier through our research in Magic Markets Premium. This week we covered JPMorgan, the banking GOAT that is a core part of my portfolio. If you're ready to give your US market knowledge a proper boost, then subscribe today at R99/month with no minimum monthly commitment. Believe me, it's worth it. |
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| Magic Markets: Retail turnarounds - high risk, high reward? |
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| | | Magic Markets: In this episode, we start off with some of the key macroeconomic indicators that investors and traders use to assess the health of the retail industry. We then go into the process of a typical turnaround, along with the milestones that are usually seen. Get the podcast and transcript here>>> |
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| Risk-off trade appears to be the order of the morning. The Nasdaq-100 has led a decline as tech stocks come under pressure on news of China’s cheaper rival to ChatGPT. The trade war narrative continues to plague markets as well. While US index futures are under pressure, the Hang Seng and Shanghai Composite are notably firmer. The dollar is slightly firmer, although US 10-year yields are marginally lower this morning.
The JSE All-Share Index is expected to open lower today, while the rand has started to weaken from overbought levels in the near term.
Oil prices have continued to decline on Trump’s call for lower prices of the commodity and support for increased US production of fossil fuels.
Gold has started to correct from near term highs and overbought territory.
There is no high impact data scheduled for today.
Key Indicators: USD/ZAR R18.53/$ | US 10yr 4.58% | Gold $2,755/oz | Platinum $955/oz | Brent Crude $76.93
As often as practically possible, insights from the IG Markets morning macro update by Shaun Murison will be featured here. Where this isn't possible, only indicators will be provided. If you want to learn more about trading, refer back to The Trader's Handbook, a podcast series that takes you through many of the important principles in trading. |
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